Skills shortages top challenge facing company bosses – survey

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Mounting skills shortages and ongoing supply chain disruptions are among the key challenges creating headaches for company directors.

The Institute of Directors (IoD) and the ASB Bank’s annual survey found that nearly 60 percent of its members were still dealing with the negative effects of the pandemic on their organisation’s performance.

The key concern for directors was the lack of skilled workers, made worse by closed borders, with 57 percent respondents saying they felt it was the biggest impediment to the country’s economic performance, compared with 32 percent in last year’s survey.

IoD chief executive Kirsten Patterson said: “We are now seeing the snowball effect of Covid-19 on workforces across multiple sectors”.

“For organisations, some financially challenged by the pandemic, there now seems to be a volatile labour force, increasing salary expectations and a gap for some of the key skills needed.”

She expected boards would have to fight to retain key staff in the years ahead, as some firms grappled with the “great resignation”, which is the trend of workers re-evaluating their priorities and looking to switch jobs or professions.

“This means organisations will need to review their approaches to things like work-life balance, positive work culture and reward and recognition in a bid to attract and retain key talent.”

Supply chain disruptions, the ongoing border closure, and vaccine efficacy were also prominent issues for board members.

The proportion of directors who thought the economy would deteriorate over the next year improved by 12 points, with 51 percent forecasting a decline.

However, board members were more upbeat about their organisation’s own future, with 54 percent expecting their fortunes to improve, up from 50 percent a year ago.

ASB chief economist Nick Tuffley said the economy was expected to grow 4 percent or more over 2022 as it rebounded from this year’s lockdowns.

“Under the traffic light system New Zealand organisations can look forward to an environment that will be more stable, with less of the extreme lurches in restrictions that were used over 2020 and 2021 to combat Covid-19.”

The relaxation of border restrictions would also allow more talent into the country, he said.

The survey also showed a growing belief that companies should get involved with social issues.

Half of respondents thought their chief executives should speak out on social issues, up from 28 percent a year ago, and a slightly higher proportion believe that the board should also be seen to comment as well.

“People are looking more and more to directors to step up and show leadership on a range of issues, on everything from climate change through to diversity in the boardroom,” Patterson said.

“When faced with a crisis we know that often your stakeholders will be more forgiving and supportive if you have sound values – and you live by them.”

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